Well, creating a business out of hemp is an expensive headache to say the least.
I need some wisdom from you all.
Currently can’t get insurance without a brick and mortar building (currently using a rent a kitchen but that’s not sufficient). Can I just lease the cheapest restaurant zoned space in my city and use that?? Will that be enough or is there more to it.
And then comes licensing. I’m not really sure WHY I need it but I know I need it. Do I need both hemp processing and food processing licences?
I’m currently turning d8 into n ingestible which I know by the FDAs standards isn’t GRAS
Insurance wants old sales to prove I’m worth it for some reason. How can I sell it legally to have those profits for the insurance when it’s technically illegal to sell without it.
I don’t really have any experience in this whole thing. Or a mentor so this forum is basically everything I’ve got and it’s been a gem if I’m being honest. Time to kick it into overdrive now because it’s getting real.
I’m not trying to cut corners, I care about what’s in my product and where it’s made. But I definitely can’t start off with the nicest space and most expensive insurance, my pockets aren’t deep enough.
Sure. Or you can find an insurance company that works better with the cannabis industry. There’s insurance for all kinds of stuff. Its would be more helpful to know what kind of insurance you are trying to get. Currently I carry… worker’s comp, general employee liability, general business liability, insurance for the building, insurance for natural disaster (different the for the building, but includes the building), capital insurance (you know, insurance for all the equipment that is not part of the building), and probably the most fun customer liability insurance (since this is now required by my state, which is insurance for the stupid things my customers might do while using my product… x.X).
Probably - depends on your state. In some states, you cannot work with D8 without having a cannabis processing license, which has nothing to do with Hemp. If you are making food and want to put it into the marketplace, then you need a food license - but you cannot put D8 into food (the laws are specific…) so this is only if you are creating like hemp bars or hemp cereal or something. Everything else that you might make would be under yours states hemp/cannabis laws to say if its legal. In most places that means you need to have a hemp cultivation license from your state AND THEN a food handling license from your local jurisdiction (county/city) that lets you do the cooking and what not.
So insurance just wants a bond guarantee - you can get this from a financial institution, from a lawyer, or from a trust fund. This just says that you are good for paying for the cost of the insurance (which if they haven’t told you yet…is stupid fucking expensive because of quasi-legal framework). So they are asking you for business information - but its not about sales, its about showing your ability to have and maintain capital - there are many ways to show that, showing sales is one way.
If you are working in an incubator space - ask the incubator owner about insurance options. Sometimes they can add you in to theirs with a rider. And they might be able to introduce you to who they are using.
There’s lots of other stuff involved with the questions you are asking. Sounds like you know what you want to do is mostly illegal (at least that’s what the regulators will think, regardless of the gray zones they have created with their poorly written rules). So its probably worth thinking about how much money you want to spend on a building, on insurance, on staff, on yourself, etc. - knowing that your business may be seized or closed for any number of random government reasons. AND THEN decide if you even care to have your business be licensed or not. There’s consequences on both sides of that coin.
I’m not advocating for unlicensed operations but I am advocating for looking at both traditional and licensed markets and the risks associated with both and making your own decision based on your experience, connections, and capital.
Also - @ky_cbd said it 100% right - knowing which state or states you plan to work in makes the specificity of this conversation infinitely easier.
Yeah so I’m licensed to the teeth now, but when I started a year ago, I had a spare bedroom in my apartment, several scripts of adderall, and some lofty dreams. I definitely don’t condone unlicensed operations because usually they are run by people who have no business making products for people to consume, however, when I started I vowed I’d as soon shut down my business before I put out products that hurt people. I made it about 5 months before I got shut down. By then, I made enough money to have commercial space, employees, and all of the requirements for my licensing so all I had to do was fill out the forms and they got it taken care of. Fake it till you make it can work sometimes if you’re locked on. Food for thought.
So I was in the process of getting my food mfg license and truth be told all of the requirements that I had to fulfill I had already done. I had everything in place with the exception of a license. Couple employees quit and dropped the dime on me and the TDA came in and inspected. They told me it was one of the cleanest and well kept establishment that they had ever “busted”. They gave me an order of closure and all of the required documentation to be completed and submitted and then they came back and inspected me a month later and gave me my license. Even scored a 97% on the inspection. They were good guys and were friendly about it. I’m glad they did what they did. They forced me to legitimize my operation and we grew as a company.
I’m just lucky. I worked my ass off as much as I could, I had people (both employees and clients) that believed in me and my standard for the product I put out. It’s possible, but hard work and timing is most of it, knowing people and being connected is what really gets it done.
So the dept of ag guys came knocking and I answered to two older gentleman that tried to come off as stern at first. I said fuck it and let them come in and inspect everything. At first they tried to hammer me (verbally) because I was unlicensed but after they started going down their checklist it was clear that I had everything I needed so they started making up shit. Of course I agreed with everything they said, and blew them some sunshine and they ended up being really cool dudes. No fines just an order of closure and they even spoke with the fine ladies at the dept to help streamline my approval process a bit (still took em a month tho…).
To anyone reading, I urge you to go through the process the right way. I did what I had to do to get by (started with 5k and a spare bedroom). By the time they came knocking I had made enough to buy all of the required stuff so I was lucky. Had I not poured everything back in (aka starved) for the first 6 months, it could have been a whole different story trying to come up with all of the requirements on the fly.